For retailers, the silver lining in natural disasters is replacement sales, as Conn’s can readily attest.
The Texas-based business took its lumps during Hurricane Harvey, when 23 showrooms, several distribution and service centers, and a corporate office were closed in the wake of the storm. All told, the 116-store furniture, bedding, appliances and CE chain lost about 100 selling days due to “unprecedented disruption” in Southeast Texas, the company said.
Now, in a third-quarter earnings preview, the retailer reported a 15-percent increase in October comp-store sales month-to-date within Harvey-impacted markets as rebuilding activities get underway.
But the same cannot be said for unaffected locales, where comps slipped about 7 percent during the same period.
Nevertheless, the decrease represents an improvement over year-ago results, when tighter consumer-finance strictures were put in place. What’s more, retail gross margins remained strong at a projected range of 39 to 39.5 percent for the quarter, and the requirement that all in-house credit customers carry property insurance has insulated Conn’s net exposure to credit losses from the hurricane.
“Current business trends indicate that Hurricane Harvey’s impact on third-quarter results will be limited, reflecting the resiliency of our business model and the value we provide customers,” said chairman, president and CEO Norm Miller. “I remain encouraged by the long-term direction we are headed and continue to anticipate full-year profitability for fiscal year 2018.”
Conn’s fiscal third quarter ended Oct. 31, and the full results will be reported in early December.
Separately, the company reported that it has raised over $500,000 in donations for impacted employees and local Texas charities.